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October 2020 Newsletter from RMT Accountants & Business Advisors

September 24, 2020

Welcome to the October 2020 Newsletter from RMT Accountants & Business AdvisorsWelcome to the

HMRC has advised VAT-registered businesses to start preparing now for changes to EU trading rules set to come into effect from 1 January 2021.     

Meanwhile, business groups, including the Confederation of British Industry (CBI) and the Association of Independent Professionals and the Self-Employed (IPSE) have welcomed the government’s announcement of cash grants for businesses affected by local coronavirus (COVID-19) lockdowns.

HMRC urges VAT-registered businesses to prepare for Brexit trading changes

HMRC has written to VAT-registered businesses that trade with the EU outlining how they should prepare for Brexit trading changes set to take effect from 2021.

The letters have been sent to VAT-registered businesses in Great Britain trading with the EU, or with the EU and the rest of the world.

From 1 January 2021, the UK will operate a full, external border with the EU. From this date, businesses will be required to submit declarations when importing and exporting goods that are categorised as ‘controlled’.

Import controls for non-controlled goods will be introduced in three stages in January, April and July.

The letters outline what businesses need to do to prepare for new processes for moving goods between the UK and the EU from 1 January 2021. Businesses are urged to ensure they have a UK Economic Operator Registration and Identification (EORI) number, and have been advised to decide how they will make customs declarations. From 1 January 2021, businesses will be able to use postponed VAT accounting to account for import VAT on their VAT Return for goods imported from anywhere in the world.

HMRC has also urged businesses to check if their imported goods are eligible for staged import controls.

Further advice on how to prepare can be found here.

Lockdown grants welcome but more support needed, say business groups

The government’s announcement of new cash grants for businesses affected by local lockdowns has been welcomed by business groups, including the Confederation of British Industry (CBI) and the Federation of Small Businesses (FSB).

Businesses in England that are required to shut because of a local lockdown will be able to claim up to £1,500 per property every three weeks. However, both the CBI and the Association of Independent Professionals and the Self-Employed (IPSE) have warned that more targeted help is still required.

Annie Gascoyne, Director of Economic Policy at the CBI, said: ‘New direct cash grants will certainly help small businesses if their area falls under new restrictions to protect public health. But the impact of COVID-19 is still hurting businesses, so the government will need to look at more targeted support in the autumn. That needs to include a successor to the furlough scheme and allowing businesses to defer VAT payments from July to September.’

Andy Chamberlain, Director of Policy at IPSE, commented: ‘We welcome the fact the government is supporting businesses affected by local lockdowns. However, although this will help some self-employed people with business premises, it will leave the great majority out in the cold.’

Meanwhile, the FSB said the grants are ‘much-needed additional financial lifelines’ for businesses most affected by COVID-19. Mike Cherry, National Chairman of the FSB, said: ‘We look forward to working together with local government to make sure there is a straightforward claims process for all firms affected.’

ESSENTIAL TAX DATES FOR OCTOBER

1 October
Due date for payment of Corporation Tax for period ended 31 December 2019.

5 October
Deadline for notifying HMRC of new sources of taxable income or gains or liability to the High Income Child Benefit Charge for 2019/20 if no tax return has been issued.

14 October
Due date for income tax for the CT61 quarter to 30 September 2020.

19 October
Tax and NICs due under a 2019/20 PAYE Settlement Agreement.
PAYE, Student loan and CIS deductions are due for the month to 5 October 2020.
PAYE quarterly payments are due for small employers for the pay periods 6 July 2020 to 5 October 2020.

31 October
Deadline for submitting ‘paper’ 2019/20 self assessment returns.

QUOTE OF THE MONTH

‘The transition period will soon be at an end but the small firms that make up 99% of our business community still have no clear sense of what they’ll be transitioning to.’

Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), commenting on the government’s Brexit negotiations.

ON OUR WEBSITE

A wealth of resources for businesses
With topics ranging from capital allowances to the Construction Industry Scheme, the Your Business section of our site is a hub of essential information.

Useful information for individuals
For a comprehensive bank of guides covering giving to charity, making a Will and much more, please visit the Your Money area of our website.

IN THE NEWS

Private pension withdrawal age to be raised
The Treasury has confirmed that the minimum age for private pension withdrawals will increase from 55 to 57 in 2028.
Click here for the full story

Up to £3.5 billion in furlough payments fraudulent, HMRC finds
HMRC has revealed that almost £3.5 billion in Coronavirus Job Retention Scheme (CJRS) payments have been claimed fraudulently or paid out in error.
Click here for the full story

Treasury publishes consultation on VAT refund scheme
The Treasury has published a consultation on reforms to the VAT refund rules.
Click here for the full story

Tax hike for freelancers would be unjust, claims IPSE
Chancellor Rishi Sunak’s plan to raise the national insurance contributions (NICs) paid by self-employed workers would be unjust, the Association of Independent Professionals and the Self-Employed (IPSE) has claimed.
Click here for the full story

UK plastic bag tax charge to be doubled and extended to all retailers
The fee for plastic shopping bags in England will be doubled to 10p and extended to all shops from April 2021.
Click here for the full story

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